The US Commodity Futures Trading Commission announced it had joined Gemini in requesting that a federal court grant relief from a judgment in the regulator’s enforcement case against the cryptocurrency exchange, filed in 2022.
The CFTC’s reversal stems from a reexamination of its investigation that concluded the original complaint should not have been filed. According to the regulator’s review, the investigation’s case rested heavily on a whistleblower account the CFTC characterized as lacking credibility. The regulator determined Gemini was itself a fraud victim rather than a perpetrator of the misconduct at issue.
The CFTC’s reexamination covered the investigation’s history, evidence relied upon, the decision to file charges, and case litigation. The regulator found serious questions about the strength of evidence against Gemini. The investigation had pursued Gemini for false statements in its registration application rather than focusing on alleged fraudsters at the center of the dispute.
Gemini settled the CFTC charges in January 2025, paying a $5 million civil penalty. The consent order included both non-prospective and prospective provisions. The CFTC determined that the non-prospective parts, including the civil monetary penalty, have been satisfied.
The regulator concluded that enforcing the prospective provisions would not serve the CFTC’s mission or the public interest. The reexamination also identified that personnel improperly influenced CFTC regulatory authority, creating settlement leverage during the case.
The request for court relief marks an unusual step in which a regulator seeks to undo its own enforcement action after settlement. The outcome of the court petition remains pending.
